Furlough Scheme Changes

The Chancellor, Rishi Sunak, has just announced changes to the Covid Furlough Scheme.

From 1/7/20, employees who were previously furloughed can return to work on a part time basis. This is a very welcome change for small business directors who previously had to “moth ball” their company to qualify for furlough as they were prevented from doing any work whilst on furlough. Directors will be able to work part time and claim furlough for the hours they’re not working.

For a director who has not yet put themselves on Furlough, current understanding of the rules is that they have until 10 June 2020 to furlough themselves, as they have to be furloughed prior to 1/7/20 and the furlough period is a minimum of 3 weeks. For the last 3 weeks of June, they’d have to do NO WORK for their company at all, other than training and statutory obligations, i.e. no chargeable nor marketing work etc. Then they could move onto the flexible furlough from 1/7/20 to work say 50:50 and claim furlough for half their usual working hours.

The furlough scheme will then be phased out during September and October as follows:-

From August, the furlough scheme will no longer cover employers NIC nor employers workplace pension contributions.

From September, the 80% furlough will reduce to 70%.

From October, the 70% furlough will reduce to 60%

Official guidance notes/announcement is linked here.